Effect on Competition
Oracle argued that DOJs definition of the markets parameters is too narrow because both the buyers and vendors are global enterprises. Even after the merger, there would be enough companies selling this software worldwide that it would be difficult for Oracle to control prices or arbitrarily raise them to the detriment of customers, Oracle argued. Oracle also rebutted the governments argument that the merger would "chill innovation" in the market. It claimed that testimony showed that "Oracle has, and will continue to have, an incentive to engage in product innovation because it faces vigorous competition from much larger rivals" in the market.Oracle has also argued that the evolution of an "application integration layer" has "brought application suite vendors" such as Oracle, PeopleSoft, SAP and Microsoft into direct competition with middleware providers such as IBM and BEA Systems Inc. Middleware is part of the "technology stack" that software vendors have to support to be competitive, it said. Oracle claimed that "competition among SAP, Oracle, IBM and Microsoft" to support the technology stack "will provide a continuing spur to innovation." Oracle claimed that PeopleSoft has no choice but to seek a merger with a company that can support the technology stack because it cant provide this technology itself. Next Page: Did the government meet its burden?
Click here to read about claims by Oracle CEO Larry Ellison that PeopleSofts CEO blew earlier talks on a merger.